Kenya Airways has received Sh10 billion soft loan from the National Treasury. The loan is expected to give the troubled airline cash to implement its turnaround strategy.
The national treasury borrowed the cash from China’s Afrexim Bank. “We have already disbursed to KQ because this money was for on lending,” said Treasury secretary Henry Rotich.
The cash injection comes a few days after KQ sent home 80 employees. It is looking to retire about 600 employees.
KQ expects to save Sh2 billion annually from the staff cuts. The airline’s staff cost has grown by 51 per cent in the past five years to Sh16.96 billion for the year ended March 2015 compared to Sh11.2 billion in 2011. Its workforce stood at 3,973 as at March last year.
The national carrier targets to save Sh20 billion in the turnaround plan dubbed Operation Pride.
This is the second tranche of a Sh20.2 billion debt taken by the Treasury on behalf of the company. The government owns 29 per cent of the airline.
